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Coeur d’Alene Mines Corporation (



Q4 2011 Earnings Call

February 23, 2012, 1:00 p.m. ET


Wendy Yang – VP, IR

Mitchell Krebs – President CEO

Frank Hanagarne – Sr VP CFO

K. Leon Hardy – SVP, Operations

Don Birak – SVP, Exploration


Jorge Beristain – Deutsche Bank

Andrew Kaip – BMO

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Good afternoon. My name is Ashley, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q4 2011 year-end earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. (Operator instructions).

Thank you. I would now like to turn today’s conference over to Wendy Yang, Vice President of Investor Relations. You may begin your conference.

Wendy Yang

Thank you, very much. Well, welcome, everyone to Coeur d'Alene Mines fourth quarter and year-end financial results conference call. I’m Wendy Yang, I’m Vice President of Investor Relation. You’ll find Coeur is listed as CDE on the New York Stock Exchange, and as CDM on the Toronto Stock Exchange. This call is being webcast at, where we have posted slides to accompany our remarks.

Telephonic replay of this call will be available from our website for one week following today’s call. We will be discussing some forward-looking information today, so we caution our audience that such statements involve risks and uncertainties that could cause actual results to differ materially from projections.

Please review our cautionary statements, shown here, and review the risk factors including some that are specific to our industry, and these are described more fully in our latest annual and quarterly financial reports filed with the U.S. SEC and Canadian regulators.

With that, I’ll turn the call over to Mitch Krebs, our President and CEO. Mitch?

Mitchell Krebs

Thanks, Wendy. Hello everybody and thank you for joining us here today. Before I begin, I’ll like to introduce Randy Buffington, our new Senior Vice President of Operations, who will oversee the company’s silver and gold operations worldwide. Randy, who has a demonstrated track record of success in both operating, open-pit and underground operations will be a integral part of our efforts to achieve operational consistency and implement internal and external growth initiatives that will create value for our shareholders. We welcome to Coeur.

Also with us here at Coeur d'Alene is Luke Russel, our Senior Vice President of Environmental Health and Safety, and Corporate social responsibility, who’s available for questions after our presentation, and also Bill Orr who heads up our Technical Services group.

Let’s get in to the slides, turning to Slide 5. 2011 was a year of transformation for Coeur. During the year we achieved record financial and operating performance. Realize, the first full year of production at our three newer long life mines, Palmarejo, San Bartolomé and Kensington, and we strengthened our management team at all levels of the company.

Our primary commitment is to produce shareholder value through operating consistency, cost containment, aggressive exploration and value creating growth. At the same time, we are dedicated to protecting shareholder value by building a culture throughout the organization that has the highest regard for environmental stewardship, employee health and safety, and fostering mutually beneficial relationships in the communities where we operate.

We continue our efforts to be the leading primary silver producer with a sustainable production profile of both silver and gold. After an aggressive build out over the last four years, San Bartolomé in 2008, Palmarejo in 2009, Kensington in 2010, and then Rochester in 2011. We now have a solid platform in place that is generating significant cash flow, and that offers strong leverage to silver and gold prices.

Our financial and operating highlights are found on Slide 6. Coeur reached new heights of success in 2011 driven primarily by a record production at Palmarejo and San Bartolomé, and higher silver and gold prices. The company realized all-time highs in full-year production, metal sales and operating cash flow. Metal sales nearly doubled in 2011 to over $1 billion and our operating cash flow increased 147% compared to 2010, and adjusted earnings were 232.5 million or $2.60 per-share, which is a five-fold increase over 2010.

Net income for the year was a record $93.5 million or $1.05 per-share compared to a net loss in 2010. And cash and equivalence increased 165% to end the year at $175 million. These record financial results were the result of dramatically improved operating performance. Silver production was up 14% to 19.1 million ounces, while gold production was up 40% to 220,382 ounces. Cash operating cost decline 3% to $6.31 per silver ounce. Total silver resources inclusive of reserves increased 8% to 525 million ounces while total gold resources, including reserves increased to 4.9 million ounces company wide.

Slide 7 highlights the priorities we have as a management team for making Coeur the most attractive precious metals equity possible. In this environment of rising prices, it’s critical that we keep cost as flat as possible so that we can provide the kind of leverage to prices that our shareholders are seeking.

To this slide, you can see what kind of leverage we provided last year. On a percentage basis, our margins increased significantly more than metals prices did. On a dollar basis, our operating margin per ounce increased from just under $10 an ounce in 2010 to over $20 an ounce in 2011.

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